Although the price of oil has fallen from a high of $147.27 in July 2008 to about $80 a barrel this month, EasyJet’s locked-in hedges caused an “adverse variance to market rates” of about £330 million ($556 million) for the full year.

The loss from the fuel hedge contrasts with EasyJet’s rival Ryanair, which two weeks ago reported a near quadrupling of first-half pre-tax profits to €419 million ($627 million), after benefiting from the lower fuel price.

However, Ryanair has itself been caught out by fuel price oscillations: in February it reported a €128.7 million ($192 million) pre-tax loss for the third quarter, after hedging its fuel costs above the prevailing price for the quarter.

EasyJet said that it anticipated a tough winter, but that next year would see the expiry of its fuel hedges and that if fuel prices remained constant, 2010 would see a “substantial” profit improvement on this year.

easyJet and SRT sign £1bn landmark maintenance deal for Airbus fleet

easyJet, Europe’s leading low-fares airline and SR Technics, a leading global aircraft maintenance provider today announced a landmark agreement for the renewal and extension of their contract creating an 11 year co-operation for the maintenance of the airline’s 157 Airbus aircraft. SR Technics has been providing support to easyJet’s Airbus fleet since 2005.

This ground-breaking contract worth £1bn ($1.6bn) will ensure the highest standards of safety and quality while delivering an industry-leading cost base for easyJet’s Airbus fleet, which will grow to 207 aircraft by 2012.

As part of the agreement between the two companies, easyJet will become the first customer at SR Technics’ new maintenance facility in Malta which was announced by the Maltese Prime Minister today.

easyJet will benefit from efficiency gains of 17% over the 11 year life of the contract due to the fact that heavy maintenance will be carried out in Malta, improving processes and economies of scale.

Andy Harrison, Chief Executive of easyJet said:

“We are delighted to extend our partnership with SR Technics. Together we will be leading the industry in setting standards in terms of safety, quality and efficiency.”

Bernd Kessler, CEO of SR Technics said:

“This is an enormous sign of trust. easyJet is a leading airline with strong growth ambitions and demands the highest quality for its fleet maintenance.”

SR Technics will continue to provide a wide range of services including aircraft maintenance and logistics services, as well as component repair and overhaul. SRT will perform maintenance tasks for easyJet’s Airbus aircraft in Malta commencing in the third quarter of 2010. The new contract will run until 2020 and reinforces the long standing partnership between the two companies.